The U.S. property/casualty insurance industry's net income for the first quarter of 2014 fell 4.0% from that of the same period a year earlier to $13.75 billion, according to a survey by Verisk Analytics' ISO unit and the Property Casualty Insurers Association of America.
Net written premiums increased 3.6% to $121.42 billion during the period and the industry's surplus grew 1.3% from that of year end 2013 to a record $662.01 billion, according to the survey, released Wednesday. Investment income also increased 10.3% to $14.11 billion.
But insurers' underwriting income fell 50.1% to $2.24 billion, and the industrywide combined ratio deteriorated to 97.3% from 94.9%. The net underwriting gains fell because of slower premium growth and higher net loss and loss adjustment expense, according to the ISO/PCI report.
The underwriting results also reflected increases in underwriting expenses and dividends to policyholders, which both rose compared with their levels in first-quarter 2013.
“Though insurers' net gains on underwriting in first quarter 2014 were down from the levels experienced a year earlier, underwriting results remained unusually strong,” said Michael R. Murray, ISO's assistant vice president for financial analysis, in a statement accompanying the report. “Insurers posted net gains on underwriting for only 21 of the 113 quarters since the start of ISO's quarterly data, and insurers' 97.3% combined ratio for first quarter 2014 was 7.7 percentage points better than the average since first quarter 1986.”
The figures are consolidated estimates for all private property/casualty insurers based on reports accounting for at least 96% of all business written by private U.S. property/casualty insurers.